September 7th – Market Wrap

On this Thursday of trading, let’s review what the markets are doing so far, and we’ll have just a couple more interesting trade set ups.

NASDAQ –  The NASDAQ put in a low that was a buy on August 21, and that has not been violated. It almost made new all time highs on Monday. It is still early enough in the daily cycle to break the highs and Tuesday & Wednesday looked like a back-test of the recent break out from the downtrend line.  I would raise my stop to that point.

SPX – That sharp drop on Tuesday also looks to have back tested a break out.  Day 11 and this can break to new all time highs too.  Recently, breaking to new all time highs has not turned into a strong rally higher,  the markets just keep rolling over into the next dcl, but it is slowly putting in higher lows and higher highs, and that is a trend higher. A bit of a rough ride for the BUY & HOLD investor.

TQQQ –  So here is the TQQQ that many here trade. Tuesday, Wednesday, or even today you could add to your current position, with a stop below the 50sma.  If you bought in at the DCL, I would raise that stop now that we’ve had the first drop out of the way.

USD – I’m watching for a close above $93.14 to convine me that the USD is moving higher with any possible follow through.  A break below the lows ( 91.55) is another lower low and the deep downtrend continues.

WTIC – Oil is acting correctly, but it is at 2 resistance points now.  It may stall, but a break above 49.60 and a close there would be bullish  (This is Bullish at this point anyway.  We are only on day 3 of a 2nd daily cycle).   The XLE has been weak, but…

XLE –  We are now seeing it break above that 50sma.  It has done this in March and July, and then failed, so it has been an area that I have not invested in personally since March ( Other than a couple of quick trades in Gush, UWT, etc).  I would like to see a break out and back test that holds.  We have been doing very well in Metals and Precious Metals, and now this becomes an area that we could look at for some trades,  but stops will be important.

NATGAS – NATGAS could drop into a dcl eventually, and that ( as a higher low above Aug lows) could become a double shoulder inverse H&S. They do exist, they do form, and they move higher after the lows are in.  So far NATGAS is dancing around the 50sma, and this has simply been a very choppy market, hard to buy & hold.  Hard to make any money.  Once it breaks out, it should run a bit cleaner.

So at this point, I really have avoided any long trades in Energy, but with OIL and the XLE in bullish positioning, I will start looking at individual stocks again, and see if there are good solid set ups.  I already pointed out  OAS & SWN as low risk set ups with a tight stop , and they are still fine ( up about 10%).

AREX– AREX, RES, ERF were ones that I repeatedly pointed out as performing well when the lows were in.  It is again up nicely and trying to break the 50sma, but it has been unable to provide a BUY & HOLD type of investment so far.  Energy has been a bit Choppy.

GOLD –  I drew this type of a run on Aug 29th for Gold as a possible run away type of move, similar to what we had in December through February. We would need to break above $1300 and continue higher.

GOLD – Gold has had a fantastic run, above 1300 & onward.  Surprises continue to the upside, so I am not selling my miners. This run is now very similar to the first run out of the ICL. If it was the same, we would be close to a peak and could drop into a dcl. If I were long GOLD- I would be using a trailing stop , since the surprises are to the upside.

GOLD – Golds 2 hr chart shows that we keep getting sharp sell offs that are just shake outs on a regular basis. We had one on Wednesday, and that is why I captured this chart when it happened. Will this drop recover too?  It did, overnight.

GOLD –  If we did finally get a sell off that had follow through, it could be a back test of the 1300. We are at the top of this price channel, and ‘time’ is right to start a drop into a dcl, so we will see how this plays out.

GDXJ –  This Sept 1 chart was to show you where it could go over time.  It was a very bullish set up.

GDX–  This is to show you how Miners might get there. Along the way it can pause, stall, go sideways, pull back a bit, etc., but GDX & GDXJ have also been surprising to the upside.

So the General Markets look like they want to move higher.  I have been Bullish on Oil since the lows and Oil and even the XLE are set up bullishly at this point. Natgas has simply been consolidating and choppy- not a good trade short or long yet, but I do think that it will eventually resolve to the upside.  Precious Metals  ( and metals like Steel and Copper) have done very well on their journey higher.  The Steel and Copper stocks have been a steady controlled climb higher, the type of buy & hold type investment that many were looking for. Precious metals and Mining stocks have been running at various time points, and this always leads to good trading.  The laggers eventually try to catch up while leaders slowly continue to chug along higher. Miners have become buy & hold and again, they are pushing higher in their own due time.   I HAD MENTIONED THAT MOVES OUT OF TRIANGLES ARE USUALLY VERY STRONG – this is why you get surprises to the upside.  I have been holding my positions on the run higher since the 2016 run higher had a dcl that was Much higher then the ICL. It was almost sideways. Enjoy your Thursday trading, it looks like the surprise to the upside continues today too, for now.

~ALEX

TRADES

SPWR –  I traded SPWR, CSIQ and other Solar stocks on their bullish run in recent months.  After a pullback & consolidation,  they do look ready to run again.  Use a stop as shown in the chart.  See ‘Run & VSLR’ too.

ENPH – This is not a solar pure play, but they provide a component for Solar Modules. I own this and posted about it weeks ago.  It has started the move higher, is at possible resistance, and I think that it may break above the 50sma and run, with this long base now completing.  I will add, or one could buuy this if it breaks out and closes above the 50sma.

MBOT – I mentioned MBOT ( medical robotics) as a possible trade with a stop below recent lows.  It sold off from above $10 recently.  While it seems to be trying to put in a base, I do want to mention that this could simply continue to base out for a while while doing a bottoming action.  I wanted to point this out…

MBOT – It has done crazy Pops higher on the way down. From this view, it actually looks like the drop ended at $1 in July, and the base is long enough to be a steady bottom, so one could buy & hold near $1  and see if it recovers  ( or put it on a watch list).

GV –  I pointed out this in yesterdays report.  They did very well for me during the Hurricane Matthew in Florida last year, see yesterdays report.

GV– Well, it did continue to move higher, and cut right through the 50sma & closed there, also breaking a recent down trend. This can run much higher.